Airbnb warns users to be wary of laws, leases

Airbnb founders Nathan Blecharczyk, Joe Gebbia and Brian Chesky pose in an Airbnb conference room modeled on the apartment where the company was born. Now that it’s worth $10 billion, Airbnb is getting serious about laws, leases and taxes. (Photo: Airbnb)

Airbnb is now warning its hosts that they need to check out gotcha’s — including local laws and their lease agreements — before they accept paying guests through the fast-growing site.

In a revised Terms of Service, Airbnb warns that many cities have laws restricting short-term paying guests, while many leases and condo agreements may prohibit the practice. It also gives a heads-up that paying hotel taxes — something the company has said it will do in San Francisco by summer — is coming soon. The company e-mailed users about the changes this week and said all hosts must agree to them by April 30.

Underscoring the gravity, some of the most-salient points are posted in all caps. Here’s what it says right off the bat about following the law:

IN PARTICULAR, HOSTS SHOULD UNDERSTAND HOW THE LAWS WORK IN THEIR RESPECTIVE CITIES. SOME CITIES HAVE LAWS THAT RESTRICT THEIR ABILITY TO HOST PAYING GUESTS FOR SHORT PERIODS. THESE LAWS ARE OFTEN PART OF A CITY’S ZONING OR ADMINISTRATIVE CODES. IN MANY CITIES, HOSTS MUST REGISTER, GET A PERMIT, OR OBTAIN A LICENSE BEFORE LISTING A PROPERTY OR ACCEPTING GUESTS. CERTAIN TYPES OF SHORT-TERM BOOKINGS MAY BE PROHIBITED ALTOGETHER.

When it comes to leases– many of which ban subletting — Airbnb says hosts had better know what their landlord or condo board allows them to do, as well as having a handle on all applicable local laws and tax requirements.

You … represent and warrant that any Listing you post and the booking of, or a Guest’s stay at, an Accommodation in a Listing you post (i) will not breach any agreements you have entered into with any third parties, such as homeowners association, condominium, lease or rental agreements, and (ii) will (a) be in compliance with all applicable laws (such as zoning laws and laws governing rentals of residential and other properties), Tax requirements, and rules and regulations that may apply to any Accommodation included in a Listing you post (including having all required permits, licenses and registrations), and (b) not conflict with the rights of third parties.

The company also specifies that hotel-tax collection is on the horizon. Right now, Airbnb does not impose hotel taxes, but it plans to start collecting them soon in San Francisco and Portland, Ore. It has also dangled the prospect of $21 million a year in hotel taxes in front of New York authorities, as part of an effort to legalize its operations there.

In certain jurisdictions, Airbnb may decide in its sole discretion to facilitate collection and remittance of Occupancy Taxes from Guests on behalf of and in-lieu of Hosts, if such tax jurisdiction asserts Airbnb or Hosts have a tax collection and remittance obligation.

Finally, Airbnb makes it clear — again, in all caps — that when something goes wrong, hosts shouldn’t expect the company to save the day.

YOU ACKNOWLEDGE AND AGREE THAT, TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE ENTIRE RISK ARISING OUT OF YOUR ACCESS TO AND USE OF THE SITE, APPLICATION AND SERVICES, AND YOUR LISTING OF ANY ACCOMMODATIONS VIA THE SITE, APPLICATION AND SERVICES REMAINS WITH YOU.

After a recent funding round of more than $400 million, the San Francisco company is now valued at more than $10 billion, more than many hotel chains. With its immense size — and the prospect of a public offering some day — it seems to be acknowledging that it’s time to play by the rules.